Everyone has the right to dispute an account on their credit report if they think that the account has been reported incorrectly or has an error on it. Part of the process is that when you dispute an account, the bureaus can’t use that derogatory information to lower your credit score until the issue is resolved. Well we humans have a natural tendency to take advantage of loopholes that are intended to help, so people started abusing the system by disputing any and all derogatory accounts regardless of the true or false nature of the reporting. The problem is that the “dispute” tag does not always get removed once the dispute has been settled. It is stuck to many accounts even ones that have been paid off and closed for years. Common sense says that an account that is paid and closed is not being disputed anymore, doesn’t it?

Now I don’t know about other industries, but the mortgage business decided that the abuse was too much of a risk so most Fannie Mae and Freddie Mac, conventional lenders have implemented a flat policy that they will not lend to a borrower that has ANY disputed accounts on their credit report. If you have a “dispute” tag on any of your accounts and you want to get a conventional loan, you have to get a letter from the original creditor that states that they will report to the credit bureaus that the account is no longer disputed. The letter itself is not good enough. So you can go about this one of two ways, you can wait the 30 to 60 days it takes for the creditor to report to the bureaus or you pay for a service that can get it reported in 3 to 4 days. Some companies call this Rescore Express and others call it Rapid Rescore. You send in the letter to a credit reporting company and they go to the bureuas and get the “dispute” tag taken off.

So you want to use a conventional loan (FHA loans do not have this “dispute” problem) and you find out you have a dispute on an account, so you call the creditor to get the letter. If the account is old and closed, the creditor does not have a huge motivation to send you that letter but let’s assume you get it.. You send it in for the quick rescore service and they send it in to the bureaus. Now the problem comes up that certain bureaus have to verify the letter with a phone call but your creditor has a policy that they do not give out that information over the phone. Now you have a problem. The bureau has to have a verification but your creditor won’t play well with others. I am currently working with a borrower that is going through this exact problem. They disputed an account 8 years ago and eventually paid it off but the dispute was never removed. They are a good credit risk. They have a good income and low debt  but they are stuck in this bureaucratic catch22.

So if you want a conventional loan and you have any disputes on your credit report please start the process of getting those removed or you will have to go with an FHA loan.

Let me know if you have any questions or if I can help.

Posted by Mark Afman under Home & Mortgage & Real Estate | No Comments »

Where you come from makes the difference as to what a low ball offer is. I am currently working with a buyer that is relocating from Florida. He is very business savvy and we had a couple of good conversations about the difference between the Real Estate markets here versus Florida.  He has been trying to be very aggressive with his offers and have been getting a rather cold shoulder from the sellers. That could just be the seller that he was dealing with and his offers were not what I would call “low ball” but they were aggressive and he was asking for closing cost concessions. He talked to his Realtor and me about it and  he was just surprised that he could not offer what he thought was a fair price and also ask for closing costs. You might be able do that in parts of Florida but not here. I’m really not trying to pick on Florida but there have been some value issues in the past but I have heard that certain parts of Florida are recovering a little.

So what is a “low ball” offer? 10% below asking price, 20% below?. I suppose it has something to do with the property and the location but I think most sellers in our area would consider an offer that is 10% lower then the listed price (especially if the buyer asks for closing costs on top of that) would be a low ball offer. The point I am trying to make is that the Denver Market is doing much better then some. For all the talk of how slow it is, I would hate to be working in parts of Florida or some other spots in the nation where 10% or 20% low offers are accepted. If you are looking to sell your home in the Denver / Front range area, it is a great time to do that. Prices are not being set by the buyers as much as in the recent past. If you are looking to buy a home now is a great time as well simply because rates are still in the low to mid 4% range. Down Payment help is still out there in the form of CHFA loans.

Let me know if I can answer any questions.

And here is todays posting of Then and Now:

This is the Asbury Methodist Episcopal Church at 32nd & Vallejo in 1882 in a photo taken by William Henry Jackson (courtesy of the Denver Public Library) There was not much around the Highland neighborhood at that time. In 2011, The church has not changed much and Highland is one of the most sought after neighborhood’s in the metro area. You can click on the Thumbnail photos here for a larger view.

Posted by Mark Afman under Home & Mortgage & Real Estate & Then and Now | No Comments »

I just received this information and wanted to pass it on.

Here is some information on the Emergency Homeowner Loan Program (EHLP) that you may want to forward to your Realtor clients. The program is designed to assist homeowners who are currently 90 days or more delinquent on their first mortgage.  The program will offer a declining balance, deferred payment “bridge loan” (non-recourse, subordinate loan with zero interest) for up to $50,000 to assist eligible homeowners who have become unemployed or underemployed due to the economic downturn or a medical condition. 

Information about the program including eligibility requirements and the application can be found at www.findehlp.org  

The funds will be distributed through a state-wide lottery which will be held in early August.  If a homeowner is interested in getting into the lottery they must complete the application and send to Douglas County Housing by 5:00 p.m. on July 22, 2011.

Completed applications may be sent to Douglas County Housing Partnership as follows:

• Email to: ahugh@douglas.co.us
• US Postal: Douglas County Housing Partnership, c/o Ann Hugh, 9350 Heritage Hills Circle, Lone Tree, CO 80124
• Fax: 303-814-2966

So if you know of anyone that might benefit from this program, send them this information.

Posted by Mark Afman under Home & Miscellaneous & Mortgage & Mortgage Information & Real Estate | No Comments »

My industry is changing, drastically. I have to spend more time shuffling papers, making sure that all the new documents are filled in exactly right for fear of losing my license. I have to spend more time explaining issues that used to not matter to underwriters, but now they might mean the difference between a young couple getting a new house or not. Realtors, buyers, and sellers are all getting frustrated with me because I am asking for things that I never had to ask for a couple years ago. Then just when you thought it was safe to go back in the water…I ask for another document of some kind. Even then, more and more deals are getting denied. Not a rosy picture

So I want to ask you a question. Are you the kind of person that likes things to stay the same? You have a routine and you don’t like it when it changes. You have  a certain way of doing your job. You come in at the same time, go to the same desk, and go home at the same time…every day. OR are you the kind of person that gets bored with the same routine? You need to be challenged. You like being away from the cubicle and y0u want to get out and look for new worlds to conquer.

I do believe that it takes both kinds to get things done. In my business, the stay-the-same folks are the ones that work behind the scenes to get the details worked out and are the steady force that you can rely on. The I-like-change people are the ones that are thinking of new ways to overcome problems and are looking for ways to grow but the kind of change that is happening now in my business is not the kind of change we like to see. So will buying a house get worse or will the pendulum start to swing back the other way to a little more sanity when you (the consumers) begin to realilze that you are paying more for the same product then you used to because we have to hire more lawyers and compliance officers and we pass that cost on to you?

The bottom line is that what I do is still as much fun as it used to be. How can I say that? Because it still is a joy to watch the face of a first time buyer when they get the keys after a closing. They may have lost their faith in all that is good in the world to get there, but they are still happy when they own a home. All I am asking is that you be understanding and patient with your lender. We are not trying to ruin your life. We are just trying to avoid being ruined by the government regulators.

Then And Now

This is the Leach house in Old Town Littleton. Besides the trees, not much has changed on this house. The old photo is from 1904 and the new one is from just a few weeks ago. This set of photos is dedicated to people like the late Bruce Wolf who loved the town of Littleton and to Stew Meagher who continues that tradition. Please click on these pictures to see a larger version.

Posted by Mark Afman under Home & Mortgage & Real Estate & Then and Now | No Comments »

A few years ago you could get a mortgage pretty easy, even if you were self employed. It was called a “stated income”

loan. All you had to do was prove that you worked, had good credit, and you just told the lender how much you made. No tax returns, no 1099′s, just tell us what you make and we will believe you. Those days are long gone. If you are self employed and you want to get a loan to buy a home, there are some things you need to know. First you have to prove that you have been self employed for at least two years in the same line of work. You have to show, through tax returns, that you have consistently increased your income or at least held is steady. Then, you have to resist the temptation to have “a good accountant” who can use the current laws to help you write off everything and show that you make a very small income, or worse, a loss, just so that you don’t pay much in taxes. When you show a small income to the IRS, you show a small income to your lender and you may have a problem with your debt to income ratio.

Now as if that is not bad enough, there is a new wrinkle for self employed borrowers. Now the lender is required to verify that you not only filed your most recent taxes but that they have already been processed and through the IRS system. The form we use to do this is called a 4506-T. Many times self employed borrowers will be granted an extension so that they don’t have to file their taxes until later. The problem with that is that we have to submit the 4506-T to find out if you filed your taxes and if you get an extension then we can’t do that and we can’t use the income from that year. It not good enough anymore to just get a copy of your taxes stamped by the IRS, They have to be filed and fully processed in order for us to use that income. So if you are self employed and thinking about applying for a mortgage, get your 2010 taxes filed now.

Let me know if you have any questions or comments. Mark Afman

Then and Now. Everything around Daniles Park has changed. In 1925, the city was many miles to the north and all the roads were dirt, Now, suburbia is within a few hundred feet of it, they have completely changed the roads to get there and there is a private golf course down below the ridge. But at least in these pictures you can see that some of the view has not changed that much. You can click on the images to see a larger version.

Daniels Park looking west 1925

Daniles Park looking west 2011

Posted by Mark Afman under Home & Mortgage & Real Estate & Then and Now | No Comments »

You need something and someone else has that something and that someone wants something in return (that you have) for providing what you need. So you enter into a transaction to  exchange the one thing for the other. It can get more complicated then that but that is the core of how an economy works. To me the question is this. Is the transaction  a battle where there is a winner and a loser or do both parties walk away happy because they worked together to come to satisfactory conclusion? An old real estate agent once told me that anytime two parties are trying to get a transaction done “one is selling and the other is being sold…just make sure that you are doing the selling.” I could not disagree more. The sales transaction does not have to be an adversarial one but rather a cooperative effort to get both parties what they need or want. I do understand that the buyer has to “beware” and many times the seller is doing the “selling” and the buyer is getting a bad deal. But I do firmly believe that if a buyer does some research and a little due diligence, they can find someone that will work with them to get them what they want or need and still come away with a fair profit for themselves. Ask for referrals from someone you trust. Ask for references from the party you are thinking of working with. Do some internet research on that person or company that you are thinking of using for a product or service. Even after doing all that, at some point you will have to have some trust in that person or company.

When I meet with a potential client, they usually sit on one side of the deak and I sit on the other side. It would be nice if the image of that relationship were one where we are all on the same side of the desk working together to get to a closing. It would be a little crowded with my desk but still image is what I’m shooting for here.  I don’t have any problem with a buyer asking questions about my rates, costs, or how I do things. In fact, I encourage that. I want the borrower to be comfortable with me and the loan that I am providing. But when it gets to the point where I am thought of as the enemy or, worse, my integrity is being questioned, then either I have not done my job or that borrower needs to find another lender. 

Your whole life is filled with transactions, don’t make all of them a battle. There is no way you can do that and live a happy life.

I welcome your comments and, as always, feel free to contact me if I can answer any questions or help you with a home loan.

Then and Now: The Denver Natural History Museum or The Denver Museum of Nature and Science…depending on how long you have lived here.

The Denver Natural History Museum was built in 1900 at the east end of City Park with an incredible view of the skyline. At the time it was near the very eastern boundary of the city. Now, the Museum of Nature and Science is housed in a building that wraps around the original. This “then” photo was taken in 1917 showing the original building and the granite sculptured entrance that is still there today but the museum takes up a lot more space. I can remember going there as a little boy marveling at the skeletons of dinosaurs and whales and seeing the dioramas of life as it once was.

Click on the photo for a larger version.

Posted by Mark Afman under Home & Mortgage & Mortgage Information & Real Estate & Then and Now | No Comments »

So tomorrow is Opening Day. Baseball lives again. I love Baseball and Opening day means the return of Summer. Tomorrow is also teh day when the Fed and Mr Frank and Mr Dodd implement their decision to restrict and give me a dis-incentive to giving good customer service. I still will, but they just made it a little harder to do because I now have to concentrate on volume which means more loans have to come in and therfore less time to spend with people like first time buyers that need the extra time to make sure they understand the process. I have even had a couple of my good Realtor partners ask if I was getting out of the business. I assured them that I was not. I also know that I can’t worry about the Frank-Dodd act. As I have said many times, I can’t always control what happens to me, I can only control how I react to it. So with positive attitude firmly in place, I will continue to do what I do and take joy in helping people get into a house that they can call their own.

OK Another Then and Now set of photos.

These pictures are of the double bridge that spans Cherry Creek down between Little Raven and Wewatta Streets. Trains have long been an important part of Denver’s economy but maybe a little less today then in 1920 when this Steam engine rolled over the same double bridge as the freight cars sit today. The whole area between Union Station and the Platte river used to be full of railroad tracks.  Now there are just a few tracks but those tracks also inclue the Light Rail whcih is taking on the spirit of the rails from days gone by. You can click on each picture to see a larger version.

Posted by Mark Afman under Home & Miscellaneous & Mortgage & Real Estate & Then and Now | No Comments »

There is a comedy sketch that has been done by several British comics called Four Yorkshiremen. <iframe title=”YouTube video player” width=”480″ height=”390″ src=”http://www.youtube.com/embed/Xe1a1wHxTyo” frameborder=”0″ allowfullscreen></iframe>The version I like the best is done by 4 of the members of Monty Python. The gist of the sketch starts out with 4 well dressed gentlemen sitting in what appears to be an exclusive club, sipping some expensive french wine. They go on to remember their childhood “30 years ago” and how tough it was and proceed to try to outdo each other in their descriptions of how difficult they had it until it gets into the ridiculous. “We got evicted from our hole in the ground, we had to live in a lake”. “We had 150 of us living in a shoe box in the middle of the road”. “I used to have to get up half an hour before I went to bed and go work at the mill for 29 hours a day”. The punch line…well I’m not going to tell you the punch line. Google Four Yorkshiremen and watch it.

The reason I bring this up is to ask the question, how will we look back on our lives.  It’s a little bit of human nature to want to build ourselves and our accomplishments up in our minds and that seems to work better when we look at where we came from and how we overcame a lot of adversity. So we make that adversity even worse then it really was so that our accomplishments seem better then they really are. It makes us feel good. However, I submit that as funny as this sketch is, if we have a good attitude and outlook on life, then we don’t need to exaggerate the good or the bad. Life was not more difficult or easier in years past and it is not any better or worse now. Circumstances can be better or worse but not the basic tenants of life remain the same. Life is what you make of it. You can’t always control what happens to you but you can control how you react to it…for what it’s worth.

Then and Now:

Speaking of tough times, Cherry Creek has always been temperamental. In the 1860′s the native people tried to tell the new arrivals that the buildings they built next to the creek bed (sometimes in the creek bed) were going to washed away when it floods. This advice was ignored until one day in 1864 when the little trickle became a torrent and did wash away several buildings including the office of the Rocky Mountain News. It has flooded several times since then but one of the worst was when the Castlewood Canyon Dam (just upstream from Franktown) broke in 1933. The resulting rush of water downstream ripped several bridges out but this one across Wynkoop Street survived. Click on each picture for a larger version.

Posted by Mark Afman under Home & Miscellaneous & Mortgage & Mortgage Blog & Mortgage Information & Real Estate & Then and Now | No Comments »

Getting a mortgage loan through the system to closing is getting harder and harder it seems. Almost every day we get some kind of communication from our underwriters or from our investors (the companies we sell our loans to and who service the loan) that there is a new guideline that decreases the risk to a Lender but makes it harder for the borrowers on the fringes to get approved. Don’t get me wrong, plenty of people are getting loans done and buying houses but it is tougher for those that are trying to get out of the bad-credit pit. But there is some good news. Some times I have a buyer that can prove part or most of their income but just not all of it. For example, a tradesman may get paid for their regular time but if the work is seasonal and they get unemployment or if they do “side jobs” but it is inconsistent, we can’t count some of their income even though common sense tells you that this source of income is legitimate.

So if that happens and that person wants to buy a house and I go over their income history and I can only use part of their income but they want to buy a house using the income that they feel is the “real” amount. Easy answer, get a Co-Mortgagor to Co-sign. OK, maybe not so easy, but it is possible.  An FHA loan allows you to use a Co-Mortgagor to Co-sign. A Co-Mortgagor is someone that is just as responsible for the house payment as the buyer even though they won’t living in the house. and their credit is just as damaged if the payments are not made. We will base the Debt-to-Income ratio on both the buyer and the co-signor. Two key things have to be in place first. The buyer has to have established credit history which is generally defined as having at least 3 open account (including at least one revolving debt {credit card}) that are all at least 12 months old. If that is in place then someone with whom you have a long term relationship can be that co-signor. As long as the co-signor has the income to offset both your debt and their own debt, we don’t have to worry about your lack of document-able income. This can be used on VA loans as well but the co-signor has to be a veteran as well with VA eligibility for a home loan.  Keep this in mind and, as always, contact me with any questions.

Then and Now:

There is not as much about this location that is the same now as it was in 1905. As you can see in this photo on the left, the building on the right is the one ting that has remaines the same. Trollies dominated the streets back then. Now the tracks have been covered by pavement and cars, bikes, and the occasional long board dominate the streets today.

You can click on the image to see a larger version. Take care.

Posted by Mark Afman under Home & Mortgage & Real Estate & Then and Now | No Comments »

If you live or work in Douglas County, CO. there is a great program to help mid to lower income home buyers to get into their first house. It’s called the Shared Equity Program andI have just been informed by Travis Anderson, the Single Family Programs Manager, that they have acquired funding through the rest of 2011. The buyer needs to qualify for an 80% conventional loan and the other 20% will be provided by the program. This 20% is a deferred payment loan but the “Shared Equity” part means that you would agree to give back 20% of the equity when you sell the home so if your property went up in value, you will pay 20% of that value back to the program. It is for 1st time buyers only and there are other restrictions but under the right circumstances this is an excellent way to get 20% more buying power then you would qualify for on your own. Let me know if you have any questions.

Now for another installment of  Then and Now:

Posted by Mark Afman under Mortgage & Then and Now | No Comments »